Market Overview

Netflix Is Expanding And Facing More Competition; What Does Wall Street Think?

Share:
Related NFLX
Pro: Netflix's Infamy As IPTV Sector Killer Could Continue
Benzinga's Top Upgrades, Downgrades For September 21, 2017
Largest Insider Trades of the Week (GuruFocus)

Internet video streaming website Netflix, Inc. (NASDAQ: NFLX) has been on the path of rapid global expansion since the service began in 1999. The company is currently available in more than 50 countries throughout North America, South America, Europe, and Australia. In addition, there has been talk of Netflix expanding its service to Asia sometime in the near future.

The streaming service recently became available in New Zealand and Australia this past March. Of the big 15 markets for films, Citigroup analyst Mark May thinks Spain, South Korea, and Italy will be the next countries into which Netflix transitions.

On March 24, May reiterated a Neutral rating on Netflix with a price target of $409, believing the company has almost tapped out all the potential growth markets around the world.

May noted, "Given the robust box offices, strong movie spend per capita, and solid broadband household bases, Italy, Spain, and South Korea will likely be among the next launches." However, he continued, "After launching in these three markets… Netflix will be faced with opportunities that are far less appealing… China, India and Russia will continue to be notable markets for the future, but given recent management commentary, regulatory hurdles, and the sizable investments required, we only consider these markets as part of the upside scenario for now."

Mark May has only given Neutral ratings on Netflix. Overall, he has a 66 percent success rate recommending stocks and a +12.2 percent average return per recommendation.

Not only is Netflix expanding around the globe, it's also increasing its original content as it faces growing competition from big players like Amazon, Hulu, HBO, Apple, and Sony. Amazon, Hulu, and HBO all have their own established streaming services. However, just weeks ago Apple announced a deal with HBO in which the technology giant secured exclusivity for HBO Now; a stand-alone service that allows consumers to watch HBO without a cable package.

In addition, Apple is currently in negotiations with media companies to create a service that live streams channel bundles onto iOS devices without requiring a cable package from users. Sony also just announced its new PlayStation Vue web-TV service, which offers a bundle of different channels and access to live and on-demand television.

However, Cantor Fitzgerald's Youssef Squali is not fazed by this competition and still thinks Netflix is the obvious leader in the internet video streaming market.

On March 24, Squali reiterated a Buy rating on Netflix and raised his price target from $450 to $500, calling the company the "poster child of Internet TV." The analyst believes that the recent interest in companies to dive into the internet television market will "disproportionally benefit Netflix" due to its strong leadership in the market. He added, "Netflix is at a significant discount to HBO Now, and should benefit from that price umbrella to justify a higher fee over time."

He added, it's the "best bang for the buck in an unbundled world."

Youssef Squali has rated Netflix 30 times since January 2010, earning an 86 percent success rate recommending the company and a +52.1 percent average return per recommendation. Overall, he has a 78 percent success rate recommending stocks and a +26.3 percent average return per recommendation.

On average, the top analyst consensus for Netflix on TipRanks is Moderate Buy.

Latest Ratings for NFLX

DateFirmActionFromTo
Sep 2017BuckinghamInitiates Coverage OnBuy
Jul 2017Credit SuisseMaintainsNeutral
Jul 2017RosenblattUpgradesNeutralBuy

View More Analyst Ratings for NFLX
View the Latest Analyst Ratings

The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: Analyst Color Analyst Ratings

 

Related Articles (NFLX)

View Comments and Join the Discussion!
Loading...
Loading...